Declaration of Conformity 2011 - Wacker Chemie AG


Declaration of Conformity 2011

Declaration of Conformity 2011 by the Executive Board and the Supervisory Board of Wacker Chemie AG

1. General Declaration Pursuant to § 161 German Stock Corporation Act

In December 2010, the Executive Board and the Supervisory Board of Wacker Chemie AG issued their last declaration of conformity pursuant to Section 161 of the German Stock Corporation Act and supplemented this with Item f) in May 2011. Since that time, Wacker Chemie AG has complied with the recommendations of the German Corporate Governance Code in the version dated May 26, 2010, with the following exceptions, and will continue to comply with the recommendations of the Code except as follows:

2. Exceptions

a) D&O Insurance Deductible for Supervisory Board Members
German law and a company’s Articles of Association set clear limits in regards to the Supervisory Board’s ability to exert influence on the business activities of a stock corporation. Pursuant to Section 76 (1) of the German Stock Corporation Act, an Executive Board is responsible for independently managing the corporation. A Supervisory Board is instrumental in defining the main features of corporate strategy. However, beyond this contribution, the Supervisory Board’s abilities are limited in terms of influencing the implementation of corporate strategy or operative business. The same applies to measures taken to avert damage or loss to the company. Since the Supervisory Board members receive a relatively low representation allowance when compared to the Executive Board members’ compensation, we do not deem the agreement of a deductible reasonable for members of the Supervisory Board.

b) Severance pay cap
We will comply with this recommendation of the Code on new appointments to the ExecutiveBoard, as well as the re-appointment of Executive Board members.

c) Appropriate consideration of women for the appointment to the Executive Board
The considerable importance that Wacker Chemie AG attaches to diversity extends to Executive Board membership. Nonetheless, expertise – including experience gained abroad – and qualifications are the key criteria here. For this reason, we do not consider it expedient to prioritize “the aim of appropriate representation of women” over expertise and qualifications.

d) Formation of a Nomination Committee within the Supervisory Board
The Supervisory Board is to establish a Nomination Committee that is exclusively composed of shareholder representatives and whose task it is to make recommendations to the Supervisory Board with regard to suitable candidates for proposal to the Annual Shareholders’ Meeting

We do not comply with this recommendation because, in view of our shareholder structure, we do not believe that the formation of such a committee is appropriate. Due to the majority situation, nominations to the Supervisory Board must be agreed with the majority shareholder in any case, so that an additional nomination committee would not serve to increase efficiency.

e) Announcement of Proposed Candidates for the Chair of the Supervisory Board to the Shareholders
According to this recommendation, shareholders shall be informed of any candidates for the Supervisory Board chair even though, as a rule, the Supervisory Board has not yet been appointed. Under German law, the Supervisory Board chair must be elected by, and from among, the Supervisory Board members. There is no legal requirement to announce the candidates for the chair from among a yet-to-be-appointed group of Supervisory Board members. Furthermore, this would result in a de facto predetermination, which is also not provided for under German law. For these reasons, we do not comply with this recommendation.

f) Performance-Oriented Compensation for Supervisory Board Members
The members of the Supervisory Board do not receive performance-oriented compensation to ensure that they maintain a high level of independence. On the one hand, the Supervisory Board only has limited potential for impacting the operative business. On the other hand, both work load and the risk of liability for Supervisory Board members generally do not progress parallel to the company’s business success. Particularly in difficult times, when variable compensation might be decreased, it can be essential for the Supervisory Board members to thoroughly fulfill their monitoring and advisory functions.

Munich, December 8, 2011